Further weakness as TransAct Technologies (NASDAQ:TACT) drops 16% this week, taking one-year losses to 40%
Investors can approximate the average market return by buying an index fund. While individual stocks can be big winners, plenty more fail to generate satisfactory returns. For example, the TransAct Technologies Incorporated (NASDAQ:TACT) share price is down 40% in the last year. That's well below the market decline of 1.9%. However, the longer term returns haven't been so bad, with the stock down 17% in the last three years. More recently, the share price has dropped a further 30% in a month. This could be related to the recent financial results - you can catch up on the most recent data by reading our company report.
Since TransAct Technologies has shed US$14m from its value in the past 7 days, let's see if the longer term decline has been driven by the business' economics.
See our latest analysis for TransAct Technologies
Because TransAct Technologies made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
TransAct Technologies grew its revenue by 29% over the last year. That's definitely a respectable growth rate. Meanwhile, the share price is down 40% over twelve months, which is disappointing given the progress made. You might even wonder if the share price was previously over-hyped. However, that's in the past now, and it's the future that matters most.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
Balance sheet strength is crucial. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.
A Different Perspective
We regret to report that TransAct Technologies shareholders are down 40% for the year. Unfortunately, that's worse than the broader market decline of 1.9%. Having said that, it's inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 0.8% over the last half decade. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with TransAct Technologies , and understanding them should be part of your investment process.
Of course TransAct Technologies may not be the best stock to buy. So you may wish to see this free collection of growth stocks.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
